The Game-Changing Implications of Crunchyroll’s Revolutionary 24/7 Anime Channel on the Industry

Highlights

Cable television is declining, with networks like ABC and ESPN being sold off by Disney due to the rise of streaming platforms such as Peacock and Amazon Prime for live sports.

Crunchyroll, America's largest anime distributor, is teaming up with GSN (Game Show Network) to broaden its presence in the realm of television, achieving a comprehensive reach across multiple entertainment platforms.

Despite the waning popularity of traditional television, Crunchyroll views this collaboration as an opportunity to generate income, entice casual viewers to subscribe to its streaming service, and serve as a promotional tool for its entire ecosystem, encompassing its online store and theatrical distribution.

In today's advancing era, cable television is in decline. There are rumors circulating that Disney may sell off networks such as ABC and ESPN, as they are no longer considered "core to their business." This revelation from Disney CEO Bob Iger is surprising, considering ESPN was once regarded as a valuable asset for the company. However, the network has been overshadowed by the rise of streaming platforms like Peacock and Amazon Prime, which now broadcast live sports. The situation became so contentious that Spectrum was willing to sever ties with the channel, as well as other networks, amidst intense negotiation disputes with Disney.

Furthermore, Warner Bros. Discovery's decision to implement significant layoffs at Turner Classic Movies and close down Cartoon Network offices further reinforces the decline of traditional network and cable TV. Even premium networks like HBO and Showtime have shifted their focus towards a streaming-first approach. Given this context, the news of Crunchyroll partnering with GSN to enter the television industry came as a surprise. The motivations behind this move, the advantages it brings, and the implications for the future of anime in America are worth exploring.

Who is GSN?

Assuming you are familiar with Crunchyroll (the largest anime distributor in America), we can safely assume that you may not be as familiar with GSN (Game Show Network). GSN is an American basic cable channel that primarily showcases game shows and related programming. It was launched in December 1994 and features a mix of original, revived, and classic game shows, as well as reality competition shows and casino-related programming.

The reason behind Crunchyroll's partnership with GSN may be attributed to the fact that GSN is owned by Sony Pictures Television. Interestingly, Sony also owns Crunchyroll, Funimation, and Right Stuf International. Up until now, Sony's anime distribution only occurred through various platforms, excluding television. However, Crunchyroll's recent announcement changes that.

Why Would Crunchyroll Go Down this Path?

The launch of Crunchyroll's channel will be a gradual process, starting with LG Channels, the Roku Channel, and Vizio WatchFree+ on October 11. Amazon's Freevee will join on October 17, and additional service providers will be announced later. While the Crunchyroll channel will offer older shows dubbed in English, new and premium shows will remain exclusive to Crunchyroll's subscription services. Initial offerings on the FAST channel will include Ranking of Kings, Moriarty the Patriot, and Code Geass, with more shows and announcements to come as the network's launch approaches.

{{h1_placeholder_2}}

This is where things become unclear: why would Crunchyroll choose to enter the TV landscape if it is truly dying? However, there are several plausible explanations for their decision. Firstly, despite the majority of us streaming anime, streaming itself remains unprofitable. Admittedly, Crunchyroll may be one of the more successful services, given that anime enthusiasts likely have a subscription. Nevertheless, even the most thriving streaming platforms earn very little profit.

The real money in the entertainment industry still primarily comes from theatrical distribution, physical media sales, and mainstream TV. Although these sectors are declining and often face narrow profit margins, Crunchyroll has been proactive in dominating every market that anime ventures into. They have increased their theatrical releases significantly, acquired Right Stuf International, an exceptionally prosperous specialty e-commerce site, and even merged with their competitor, Funimation, forming an anime powerhouse.

While linear TV may be declining, it still generates revenue. Although Spectrum cannot afford to increase fees for ESPN and Disney Channel, they still benefit from having these channels. With the popularity of anime surpassing that of the early 2000s, dedicating a channel to anime will likely be profitable for the company.

Moreover, this creates a complementary relationship with the app. Crunchyroll views the network as a platform for people to "sample anime," hoping that casual viewers will be intrigued and ultimately subscribe to the Crunchyroll app. Additionally, these viewers may become avid fans who make purchases from the recently merged Crunchyroll Store. Even if financial concerns lead casual fans to cancel their subscription, they can still engage with the 24/7 channel.

Streaming may not be as lucrative as initially thought, as companies like Disney, Warner Bros. Discovery, and Netflix have come to realize. If these industry giants are reverting back to traditional methods of releasing content (for instance, through expensive BluRay box sets), it's likely that Crunchyroll is following suit. While their 24/7 channel may not generate significant profits, it will still serve as a revenue source and a promotional platform for the wider Crunchyroll ecosystem.

In addition to their streaming service, Crunchyroll also possesses an online e-commerce store, theatrical distribution capabilities, ownership of certain content, and a comprehensive system for selling and distributing their products. Furthermore, they now have the opportunity to partner with cable companies to carry their 24/7 network. This strongly underscores Crunchyroll's dominance in this niche industry and, when viewed from this perspective, their strategy makes perfect sense.